Competitive KPIs of Asset optimization relative to ISO 55001 certificate
To improve the competitiveness of the end product of one enterprise, the asset optimization is a chanllengeable but effective improvement opportunity which is one heavy component of the operational cost. For physical asset, the monetary value of human resources often takes 25-50 percentage of operational cost (The percentages of labor cost in US and Europe are usually higher than Asia and Africa though the gap is disappearing in recent years. ), asset consumption is usually about 30%, and the energy consumption is usually about 25-30%. So the goal of asset optimization is usually to reduce the labor usage, fixed asset consumption and the energy consumption which can reduce operational cost dramatically. For an excellent enterprise, the operational cost often takes 5% of system cost with the poor one being around 15%. To maximize the asset value, the other perspective is to focus on the OEE which will be 70 t0 85% with an exellently run enterprise. Based on these, some people who involved in the draft of ISO 55000 recomendded to increase the weight of operational cost percentage and OEE to 20% respectively without an agreement. Any way the 9 competitive KPIs use the same weight reached the agreement until the April of Year 2014. By the global climate warming, advocating for less enegy consumption is an eternal topic especially for those who want to be an responsible ones and have an good reputation to be an social and ecological contributors consistently.
To accomplish the targets of 9 KPIs, 40 KBIs are recommended to indicate the practice levels. Supportive best practices are advocated by PAS 55 which experienced a lot of perfection and was converted to ISO 55000. 17 modules are raised in PAS 55 which evolved to 7 ones in ISO. Though 17 modules were not mentioned in ISO 55000 series any more, the best practices are generally accepted in manufacturing and service industry. Based on the same reason, the competitive 9 KPIs and 40 KBIs relative to PAS 55 are also adopted popularly in the world who would like to use ISO 55000 to guide their asset management and optimization.
Asset provision and how to trigger it
The level of asset provision is the average OEE of capacity pool in one specific duration such as one year. One month after the asset provsion, the average OEE of capacity pool can be calculated.
Asset provision level is one core KPI of enterprise's competitiveness because the percentage of assets' cost including depreciation, maintenance, energy consumption and labor usage etc. in the operational cost is more than 60%. The best provision level in the world is between 65% and 75%.
Asset provision includes asset purchase, asset relocation, asset scrap and asset sales etc.
Capacity pool is the combined capacity of series of platforms which can produce same categories of SKUs. When calculating provision level, the OEE of capacity pool should be combined as weighted average of different platforms such as equipment producing bread and lines fermenting beer. When triggering one specific provision action, the OEE of capacity pool must be calculated by same separated platforms. Bread lines cannot be calculated together with beer ones. Besides, when having new provision, capacity pool must include all of the same platforms in the whole enterprise. When having asset relocation, the same platforms of the capacity pool can be only in one area or specific asset combination.
Asset purchase must consider all of the same platforms in the whole enterprise. Asset relocation only consider the same platforms of one specific combination such as the same platforms in one or several plants which belongs to one specific enterprise.
Triggering of provision is based on the market change or production change if the improvement of OEE has no space any more in current management level of one production unit. If there is improvement of OEE, never consider provision. Based on the production data of capacity pool in the history, the market trend can be observed. If there is one flat trend line, there is no necessaty of asset provision. If the trend line decrease, separate the idle assets from the financial register should be triggered. Only if the trend line increase, the asset purchase can be triggered step by step to avoid cliff provision which may result asset wall or redudance.